SEC Files Lawsuits Against Conspirators In Blockchain Terminal’s $30 Million Fraudulent ICO

CG Blockchain Inc., BCT In. (SEZC), has been charged with fraud by the US Securities and Exchange Commission (SEC), for funds raised on an ICO at over 30 million dollars by the companies operators, Edith Pardo and Boaz Manor.

In a SEC press release from Friday, it’s being said that Manor allegedly hid a criminal conviction from the past. It seems he was working under a fake a name and passed as Pardo’s employee in order to begin the raising of funds for the project. In an effort to do this, he even disguised himself because his actual identity may have been toxic for the company.

Investors Should Check the Identity of Those Who Are Raising Funds

Joseph Sansone, SEC Market Abuse Unit’s co-chief, said in a statement that investors should check the identities of people who are raising funds. These are his Sansone’s exact words:

“As alleged in our complaint, Manor’s brazen scheme to conceal his identity and criminal history deprived investors of essential information and allowed defendants to take over $30 million from investors’ pockets.”

The US Attorney’s Office for the District of New Jersey also filed criminal charges against Manor and Pardo also says the SEC. Back in 2017 and 2018, Manor raised funds for the Blockchain Terminal cryptocurrency version.

SEC Looking for Disgorgement of Profits Obtained Illegally

The SEC is seeking disgorgement of profits obtained illegally plus penalties, injunctive relief and interest. It also wants to bar Manor and Pardo from ever being able to occupy the positions of director and officer within public companies, also from taking part in any securities offering in the future.

Manor was sentenced to 4 years in prison in Canada back in 2012 because he siphoned $106 million from a hedge fund he co-founded in Toronto. It was reported the Canadian fund was managing $800 million in assets from 26,000 investors. SEC sent on January 14 a warning through its Investor Education and Advocacy subsidiary, saying people should keep their eyes open when being presented initial coin offerings.

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Author: Oana Ularu

Decentralized Finance (DeFi) Grew To $668 Million In 2019, How Will Taxes Be Calculated?

2019’s decentralized finance (DeFi) boom that has led to more than $785 million being locked in crypto assets is giving accountants serious headaches.

Antoine Scalie, the CEO of accounting startup Cryptio says complex assets and transactions make it for the accounting to be more difficult. For this reason, Winklevoss Capital and Dragonfly Capital have invested millions in accounting startups like TaxBit. Alex Pack, the co-founder of DragonFly Capital thinks there are many blockchain attacks around pseudonymity and anonymity, and that the IRS doesn’t really know how to stack DeFi products, since clear categories for experimental assets don’t exist.

TaxBit Working on Tax Optimization

It seems DeFi users who used financial products not offered by exchanges and MakerDAO loans have to enter details about their transaction manually, so they pretty much rely on the help of the Certified Public Accountants and tax attorneys working for TaxBit’s support line.

The Requirements Are Unclear

Both Cryptio and TaxBit are making efforts to make their systems capable of automatically flagging the events in the DeFi ecosystem that have potential to be taxed. Cryptio doesn’t provide retail users a Turbo Tax option like TaxBit does. However, it helps its DeFi clients record information on smart contracts that have been “touched” by the asset.

Since the accounting requirements aren’t at all clear, Credit Karma has conducted a survey and discovered only 0.04% of Americans have reported their crypto transactions for the 2018 taxation, whereas 4% of the population in the country reported they used crypto that time.

This had the IRS issuing an update on the crypto-oriented guidance, back in 2019. Crypto and TaxBit representatives agree the complexity of tax reporting is impeding the crypto adoption. People have no idea how the technology for this works without filling in paperwork. The startups’ role is to make the usage more compliant and mainstream.

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Author: Oana Ularu

TRON Dev Team, TRONZ, Forks ZCash’s Privacy Tech, Zk-SNARKs To Add to MainNet

TRONZ team is set to implement privacy protocol which is poised to be the biggest Multi-party Computation in blockchain’s history. Tron states that a setup ceremony will be held soon claiming that it will become a Guinness World Record.

TRONZ is made up of community developers who have come up with the anonymity protocol found in TRON’s main chain. Now, the team is finally through with public testing as well as testnet and is now set to introduce anonymous transaction in the TRON MainNet. Currently the TRONZ team is looking at the MainNet MPC process and in the coming days it will roll on MPC Torch Project based on the MPC process.

Cointelegraph reports that the project aims at integrating Zk-SNARKs which is the main privacy protocol found in Zcash (ZEC), within the Tron blockchain. Although the team boasted that the implementation of the new technology is the most efficient, there were no technical details given about the protocol.

The main aim of the TRONZ is to launch the privacy protocol to enhance Tron smart contracts which will enable developers to roll on private data within the smart contracts. Also, the team looks forward to provide blockchain-based MPC solution to enhance private computing needs.

An analysis of Tron GitHub page indicates that different repositories were directly forked or copied from the source code of Zcash. Most of the repositories meant for privacy looks like they have not been updated for a couple of months. The MPC code was also directly copied from Zcash. However it is probable that the TRONZ team was more concerned with the original Tron repositories meant to integrate the privacy protocol.

Meanwhile, according to Utoday, Tron has surged into the top ten following the announcement of the new developments. In addition, Tron’s founder Justin Sun has also said that the firm is working on a decentralized stablecoin which will be based both on TRX and BTT.

The surge could also have been brought by the recent rallying of cryptos where TRX is now back to top 10 as per the CoinMarketCap scale having being absent for almost a year.

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Author: Joseph Kibe

Chrysler Building’s Blockchain Real Estate Owners To Sell Building In Zurich, $135M Cash & ERC20

The current owner of the Chrysler building is offloading a property valued at around $135 million to a blockchain-based real estate firm. It’s expected that the buyers will pay a fifth of the asking price in the form of tokenized securities.

RFR Holdings, based in New York are the new owners of the Chrysler building after purchasing it in early 2019 as part of a joint buying agreement. The firm recently arranged to offload its common stake in Zurich-based corporate building to a real estate agency known as BrickMark, and which has offices in both Germany and Switzerland.

Announcement of the Purchase Agreement

This past Wednesday, BrickMark sent out a presser stating that as per the acquisition agreement, it would be paying 20 percent or a fifth of the asking price in the form of its official BMT security token.

Based on the terms agreed upon by all parties, BrickMark will now own eighty percent of the commercial property. It will also have an option to the shares remaining with RFR, though it has to do so by September 2020. While the selling price has not been made public, experts believe that the tokens are valued at tens of millions of euros.

Stephan Rind, the BrickMark CEO commented on the deal and stated that it was one-of-a-kind, and was so far the largest transaction to involve the use of digital tokens. Stephan went on to add that:

“There has never been a token-based real estate transaction of this magnitude. We are implementing what was once no more than a concept in the real estate industry.”

The commercial building in question is located in Bahnhofstrasse, in its down street area. In this area, the rent per square meter ranges between thirteen thousand and fifteen thousand dollars a year, a figure that makes it among the most affluent shopping areas around the globe.

News reports from 2014 indicate that Swatch Group acquired a property close to that location at an estimated price of four hundred and nine million dollars.

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Author: Daniel W

Crypto Wallet BRD Expands Core Business, Launches Enterprise Blockchain Service ‘Blockset’

BRD, a Mobile crypto wallet services provider backed by Ripple as well as SBI Holding, has announced it is expanding to the enterprise sector and has launched Blockset blockchain that will enable developers to easily develop apps for enterprises.

In a press release, the firm explained that the new blockchain will be a data integration platform that comes with different tools that will enable coders to develop quality enterprise blockchain applications. The new product will target the banking and financial services providers and big crypto-based firms. According to the announcement, Blockset will offer tools that are ready to use that will reduce the costs of development for coders.

One of the major benefits of Blockset is that nodes can easily be hosted ‘out of the box’. This will help in the reduction of the hosting costs as well as development costs that are used by blockchains offering major chain support.

More than 20 financial institutions are already testing Blockset blockchain in what the firm termed as a private pre-release program. The program has notable names such as SBI Holdings, Ripple as well as KPMG. BRD plans to bring on board crucial channel partners as well as global system integrators in order to fast-track the adoption of the blockchain in the coming months.

BRD also stated that Blockset will be available globally starting from Jan. 17, and will focus more on the financial sector and other blockchain-based enterprises like exchanges. According to the company,

“Blockset … will fundamentally realign BRD’s business model for the high growth demands of the financial services and banking industry worldwide.”

Currently, Blockset top cryptos like Bitcoin, Ethereum, XRP, Bitcoin Cash and Hedera. Plans are underway to add more cryptocurrencies before the end of the year.

According to the firm’s CEO and co-founder, Adam Traidman, about 90 percent of the largest banks in the world are exploring crypto and it is thus clear that the demand for enterprise blockchain services is on the rise. He added,

“That is why we developed our own proprietary platform (Blockset) which banks, financial services, and large crypto companies will now be able to leverage to accelerate their time to market and deliver enterprise solutions to scale on a global basis for a fraction of the development costs.”

Update To Original Article: Headline change while adding in more information from BRD.

The BRD team reached out to us to clarify on our original headline that this is not a ‘pivot’ from their core business, just an expansion into new areas.

The BRD consumer wallet business just had its best year ever (new users) and they also had a record number of new user growth in Q4. Most importantly, they will continue to invest and hire for our consumer wallet business. It’s more expansion into a new market for BRD; the enterprise data integration space for blockchain.

In spite of what appears to be a ‘glass ceiling’ on consumer crypto growth the past 18 months, the BRD mobile apps have grown tremendously. We just wrapped up a record quarter (Q4 2019) and a record year (2019) for new user growth. We closed 2019 by crossing over the 3M users mark worldwide (73% growth to our total installed based Y-o-Y). We remain humbled by the fact that over $6 billion USD worth of crypto assets under our protection, that kind of faith in our brand is the singular inspiration behind all our endeavors.

What’s been driving the 2019 growth are the sizable enhancements we’ve made to our Android app that’s allowed us to have a much stronger presence in emerging markets in Asia and South America.

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Author: Joseph Kibe

Ripple: Asia-Pacific Remittance Market Seeing Growing Demand And is Ripe for Digitalization

  • APAC digital transfer and remittance market expected to grow by 24.2% from 2018 until 2025
  • But what’s astounding is the expensive services charging as high as 10.34%

In its latest insight report, Ripple shares the growing demand the Asia-Pacific (APAC) region is seeing.

“More remitters than ever are sending money home to their loved ones,” the San Francisco-based company points out adding APAC saw a growth of 12% in remittance flows in 2018, as per World Bank. About 2bln in remittance transactions flow in the area every year.

APAC region to see a growth of over 24%

Remittance flows in the Philippines, makes them the 3rd largest remittance-receiving nation worldwide, and another staggering number that is reaching record highs of $529 billion last year is Thailand, and is also anticipated to see exponential growth as the Philippines greatest help for external financing.

On the opposite side, Australia and Thailand entice a remarkable amount of migrant workers. Australia’s payment outflows are $7.2 billion to China, India, Vietnam, the UK, and the Philippines. Also becoming a major destination for foreign workers is Thailand, with $7.5 billion set against ejaculations of $4.9 billion estimated payment inflows.

From 2018 until 2025, APAC digital transfer and remittance market is actually expected to experience a Compound Annual Growth Rate (CAGR) of 24.2%.

But traditional payment channels charging fees as high as 10%

The rise of worldwide remittances is “significant” but even more astounding are the expensive services. Ripple notes,

“The Asia-Pacific (APAC) region is seeing significant growth in remittances, yet the high cost of cross border payments leaves remitters with few options.”

Here blockchain technologies have a huge part to play as they can offer a fast, smooth encounter for global payments with reliability, and transparency, that people are accustomed to and require from services like email.

The global median cost of transferring $200 was 6.84% in 3Q19, with banks charging an average fee as high as 10.34%.

There is also a high price variance by corridors, from Thailand to Vietnam, Lo PDR, and China has remittance fees exceeding 10% in 2018.

Blockchain provides a solution

Financial businesses desire a cheaper, simpler, and more effective way of processing cross-border transactions and blockchain has created a resolution.

With APAC market “ripe for digitization,” Ripple is already working and seeing much activity in the Philippines and Thai market.

Recently, the company along with Thailand’s oldest bank Siam Commercial Bank announced that they were working on enabling cross-border payments via QR codes.

Through its partner FlashFX, Ripple has opened payment channels in Mexico, the US, and the Philippines with Australia next on the list. Apart from SendFriend, MoneyGram is also using XRP to conduct transactions in Europe, Australia, and the Philippines as well to tap this growing demand in APAC region.

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Author: AnTy

Will Russia’s New Prime Minister Help Foster The Adoption Of Cryptocurrencies?

The Russian Federation Prime Minister has made a call asking his country people to try and prioritize the development of the digital economy.

RIA NOVOSTI, a Russian news outlet on 16th January 2020 reported that Mikhail Mishustin, who had earlier in the day been confirmed as the new Russian Prime Minister had placed some priorities on certain areas of the economy that he was keen on focusing on.

The Prime Minister’s first order of business after getting into office was to outline the institutional areas in the country that were in urgent need of reforms. He pointed out that there was a need for the country to start implementing new information technologies. He said,

“The first thing we want to do is seriously engage in institutional reforms. Management reforms, introduce the latest digital technologies… Without a doubt, the state should become a digital platform that is created for people.”

Among the technologies that the country needs to implement are those touching on digital economies in the federation. Mishustin added that:

“The state should become a digital platform that is created for people.”

His statement came on the heels of the resignation of the entire government that had previously been led by Dmitry Medvedev, the former prime minister. The decision to resign is one that was arrived after Vladimir Putin, the country’s president addressed the national assembly and stated that the constitution needed to undergo certain changes.

Blockchain Plays a Crucial Role in Many Russian Companies

Some of the largest companies in the country, including many of which the government holds a significant stake have already started to test the blockchain infrastructure. Some have even gone ahead to apply some of its uses in their operations.

In 2019, Rosetti, the national energy grid operator in the country implemented a blockchain solution with the aim of automating payments in the retail energy sector. The solution would also be used to make certain that the transactions occurring between consumers, suppliers, and energy producers were clear as crystal in nature.

As 2019 was coming to a close, Sberbank, the majority government-owned bank, which also happens to be the largest in the state led the way in introducing a blockchain-based solution aimed at dealing with repurchase contracts. Before its introduction, it had received a patent for this blockchain solution which relies on smart contract technology to assist in automating repo relations between various entities.

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Author: Daniel W

Nationwide Survey: One-Third Of Small And Mid-Sized Businesses Accept Crypto Payments

  • 36% of Small and Medium-sized Business in the US offering Crypto alternatives for payment systems
  • Newer business are more likely to take up cryptocurrencies

The Hartford Steam Boiler (HSB) commissioned Zogby Analytics to carry out a survey regarding uptake of cryptocurrencies by Small and Medium Enterprises based in the US. They released a statement with conclusive data on their official Twitter account indicating more than a third of Small and Mid-sized businesses in the US have taken up cryptocurrencies as a payment option.

The survey showed that 36% of small and medium businesses have adopted crypto payment systems while a reported 59% has bought crypto for their own operations. The survey also showed that more than twice of new businesses in the US are likely to incorporate cryptocurrencies in their payment systems. 47% of the businesses sampled that accept crypto has been operational for less than half a decade while in comparison to 21% of businesses that were around for more than two decades.

This could be directly attributed to the fact that cryptocurrencies offer an option of faster transaction speeds and low transactional fees.

Drawbacks opened up by cryptocurrency adoption

However, HSB VP Timothy Zeilman was keen to note that despite the advantages offered by cryptocurrencies is more likely to open up the businesses to a new array of problems. This was expressed in his statement

“Cyber criminals follow the money and fraud can be a serious problem. A number of currency exchanges have been hacked or embezzled and millions of dollars were lost.”

Cybercriminals may target such businesses with complex attacks that may be marked by malware targeting information that they could use or sell. Hackers may also infiltrate the company’s systems in an effort to try and divert computing power for recording and verifying cryptocurrency transactions. The regulations put in place for the cryptocurrency may be a bit vague especially when transacting internationally and in case of fraud, the businesses may have nowhere to turn to for help.

All is not lost as the business could take up a few steps as advised by the HSB survey to help prevent exposure to cybercrimes. They could start by learning more about the technologies and how they work before fully embracing them. They could also improve existing security policies if any have been put in place yet.

About the Survey

The survey was carried out by Zogby analytics that provides custom research and insight to leaders of businesses and communities, as well as to individuals. The latter used a sample space of around 509 small and medium businesses based in the US.

It was commissioned by Hartford Steam Boiler (HSB) an insurance company that provides inspection, risk management and amongst providing IOT Tech services. It’s a subsidiary of Munich Re, a leader in Reinsurance worldwide.

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Author: Lujan Odera

New Congressional Bill Seeks To Exempt Small Crypto Transactions From Taxes

A Congressional bill seeking to exempt daily crypto purchases and transactions from capital gains taxation has been returned to the US Congress.

The bill known as “The Virtual Currency Tax Fairness Act of 2020,” seeks to exempt digital currency expenditures that are personal transactions from capital gains taxation. Users will not be required to report when they used their crypto assets whose values have since changed as per the value of the US dollar on their daily expenses.

The bill was introduced to the house by Representatives David Schweikert (R-AZ) and Suzan DelBene (D-WA) on Jan.16. In 2017, Schweikert had introduced a similar bill but had recommended a greater exemption than the current one.

The current tax law has faced challenges in the advent of cryptocurrencies as at times they are taken as investments, other times as commodities while other times like other currencies. The bill seeks to simplify on the last form of crypto for both traders as well as users.

The bill seeks to address various issues that came to the fore from the IRS after the agency stated that Bitcoin and other cryptos can be said to be some form of property whereby, any transaction big or small leads to a taxable event and the users are liable for capital gains taxation. This 2014 determination by IRS led to criticism that it infringes on the use of cryptos as a currency as a result of the tax burdens involved.

As per the bill, taxpayers will be exempted from duty reporting if the gains are less than $200. The previous bill had set the limit slightly higher at $600. In addition, the bill will also insert a fresh clause classifying this as gross income. As the bill states:

“Gross income of an individual shall not include gain, by reason of changes in exchange rates, from the disposition of virtual currency in a personal transaction (as such term is defined in section 11 988(e)). The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200.”

If the Congress okays the bill, it will cover transactions that have occured only after Dec. 31, 2019.

As the Block reports, the bill was hailed by Coin Center which has been pushing for exemptions on transactions. The group said that the bill provides an easy solution to a glaring problems when it comes to the taxation of cryptos and will help in the enhancement of financial technology.

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Author: Joseph Kibe

Grayscale Reveals Record-Breaking Year In 2019 With Q4 As the Best Quarter

  • Since inception, Grayscale’s combined investment has reached $1.17 billion
  • Despite BTC price declining 10%, it was the best quarter ever
  • Grayscale’s overall client base also jumped by about 24%
  • Institutional investors and primarily hedge funds make up for 71% of the company’s investors

In its 2019 Digital Asset Investment Report, Grayscale Digital Asset reveals a record-breaking year, especially Q4 of 2019.

Investment for Financial Year 2019 had been $607.7 million that surpassed the combined investment into all Grayscale products from 2013 through 2018. The cumulative investment across Grayscale products have reached $1.17 billion since its inception.

In this “most significant asset raising year in Grayscale’s history,” Q4 played a big part by contributing the largest quarterly investment of $193.8 exceeding $171.7 million in 3Q19.

Interestingly, the price of Bitcoin increased the hardest in Q2 by 160% while Q4 saw the loss of 10.40% which was beaten by the Q3 losses of 25.11%.

Just like the losses, Grayscale saw the back-to-back quarterly investment of $225 million in 3Q19 and 4Q19.

Institutional investors & primarily hedge funds leading the pack

This incredible investment performance was in part driven by the expanded user base of the company. Grayscale’s overall client base jumped by about 24% in 2019 and accounted for 24% of new investment at $146.9 million.

However, current investors still lead the growth as over 76% of capital raised, $460.8 came from its existing clients.

Also, it’s no longer only limited to Bitcoin as 36% of Grayscale clients have allocations to multiple products, the company offers investment in Bitcoin, Ethereum, Ethereum Classic, XRP, Zcash, Bitcoin Cash, Stellar Lumens, and Horizen.

When it comes to investors, institutional investors and primarily hedge funds with a share of a whopping 71% continued to be the company’s primary source of investment capital for 2019.

Larger investments from high-net-worth individuals (HNWI) however, added a meaningful investment of $93.2 million in 4Q19.

Most of these investors that have been roughly split between the US and offshore investors were more heavily weighted to US-domiciled in Q4.

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Author: AnTy